Monitor oversees mortgage settlement with five banks
The court-appointed monitor of a $25 billion U.S. settlement with five banks over abusive foreclosure practices said he's hoping ...
The court-appointed monitor of a $25 billion U.S. settlement with five banks over abusive foreclosure practices said he's hoping consumer advocates will let him know if banks aren't complying.
Joseph A. Smith Jr., who left his position as North Carolina's banking commissioner to take the monitoring job, said he's set up a website — www.mortgageoversight.com/report-client-issues/ — where housing counselors, bankruptcy lawyers and other advocates can report problems.
"I am hopeful that we will get additional input in terms of our review of the banks' work from out in the field," he said. Smith said Wednesday he's working on setting up uniform standards for monitoring compliance at each bank, and has hired BDO Consulting to help. He said he plans to hire additional outside consultants to track each bank's progress.
The settlement agreement, filed in federal court in Washington, D.C., in February, was reached after attorneys general from all 50 states announced a probe into foreclosure practices after disclosures that banks were using faulty documents to seize homes.
The nation's five largest mortgage servicers — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — negotiated the agreement with federal agencies, including the Justice Department, and 49 states.
The banks have committed $20 billion in relief for borrowers plus payments of $5 billion to states and the federal government.
About $17 billion of the agreement will pay for mortgage-debt forgiveness, forbearance, short sales and other assistance to homeowners. Servicers will also provide $3 billion in refinancing to lower homeowners' interest rates. The settlement also sets new standards for servicing loans aimed at preventing foreclosure abuses.
Smith said he expects to get reports on the banks' consumer relief efforts later this year. Progress reports on servicing standards will come at the beginning of next year, he said.